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2001 – Innovation in Japan

Prologis transformed the industrial warehouse sector in Japan with modern buildings equipped to withstand earthquakes and tsunamis.

Prologis developed this facility for DHL Worldwide when it needed to build a distribution center in Japan. The facility was completed in 2002.

By addressing the evolving needs of its customers and expanding alongside them into Mexico and Europe, Prologis had become an international development company and was eager to gain further traction in key markets across the globe.

In 2001, when DHL Worldwide, one of the world’s leading postal and logistics services companies, wanted to build a distribution hub for its Japanese operations, Prologis spearheaded its development—procuring land, designing a structure and overseeing its construction.

It proved an opportune moment to enter the Japan market. At the time, most of the country’s warehouses were relics from World War II, outmoded facilities owned by Japanese companies struggling to stay afloat through the economic stagnation that started in the late 1980s.

To free up capital, many of those companies decided to sell their facilities and move toward a leasing model, creating a window of opportunity for Prologis to develop Class-A facilities.

After acquiring land and assembling a local team under the direction of Mike Yamada, Prologis set out to create the logistics real estate sector in Japan. Constructing distribution facilities in Japan, however, offered unique challenges. With land in cities like Tokyo and Osaka in such short supply, Prologis deviated from its tradition of constructing flat, rectangular buildings in favor of multistory structures.

These facilities were designed with state-of-the art seismic isolation systems to protect them from earthquakes, and were engineered to allow trucks to drive up to different floors, similar to a parking garage. Prologis leased out individual floors to different companies to maximize returns.

The new structures attracted such a steady flow of domestic and international clients that occupancy rates on Prologis buildings rarely dip below 92%. By 2013, Prologis had built more than 44% of all the Class-A logistics facilities in Japan to date.

“Our type of business didn’t really exist in Japan,” said Ed Nekritz, chief legal officer and general counsel for Prologis. “There was no such thing as a modern distribution or logistics facility. Now, when you drive down the major thoroughfares of Tokyo, you can see how the Prologis buildings compare with the old standard rickety warehouses. They are really amazing.”